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Replaying 1929 "Standup Economics" This economy is a what? |
Updated: Saturday, November 17, 2007 07:50 CST The Early Briefing - In depth perspectives are for subscribers to www.peoplenomics.com |
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"Death of the Dollar" If you caught predictive linguistics genius Cliff (www.halfpasthuman.com) and me on CoastToCoastAM with George Noory back on the Fourth of July, you'll remember the "death of the dollar" prediction for the fall/winter of this year. As it continues to evolve today, a headline in the UK's "Independent" calls it "The dollar's decline: from symbol of hegemony to shunned currency".
Here's the important thing to get through your head: This about ensures $5-$7 dollar gasoline, perhaps by January/February, in my view. Why? "Saudi minister warns of dollar collapse" blares one headline.
OPEC has a rare summit planned for today, but the main topic is oil and what it fetches in US dollars. Saudi's and Iranians disagree, which is expected. Linguistically, sometime around the 22nd (*Thanksgiving) we seem likely to see the financial disaster pick up steam. Again.
Warming: Extinction Level Event Not to start up your weekend with an alarming warning, but there's a report out by some very smart folks on a UN panel that says the earth is headed toward lots of extinctions because of global warming, and not an easy time for humans. Yeah, big surprise, huh? --- All of which would be quite avoidable if we had developed something other than a money-oriented culture and had opted to produce what's needed for life locally instead of playing the labor spreads all over the world to make more 'paper', but you already knew that, and I don't mean to harp on the utter hypocrisy of the corporate folks getting on this band wagon and still clinging to their bankrupt ideals and pretending to be leaders worth following. Give it a rest. The sheep aren't entirely stoopid.
The thinking that got us into the evolving crisis will not get us out. We need new thinking, new paradigms, and where are they? Certainly not from the sorry batch of presidential wannabe's (Ron Paul excepted, it goes without saying) or most leaders being sold by the corpgov establishment...
District of Corruption You'd might like to think that if there's any city in the nation which holds its head highest, adhering only to the highest of ethics and behaviors, it would be the Nation's Capitol, Washington D.C. Well, you'd be wrong. There's a huge accounting board scandal that is likely to his the national mainstream along about next week that point to just how crooked things are in what I not-entirely light-heartedly call the District of Corruption.
No War Funding Bill So with a million people (and more) impacted by the War, what does CONgress do? Go on Thanksgiving break, of course. Who voted for these clowns?
Musharraf's Nuke Card President "We'll hold elections when I say so" Musharraf in Pakistan is playing the nuclear card, saying he's worried that the countries nukes could fall into wrong hands. Hmmm...there've been rumors about that the US already has sent in teams to ensure that doesn't happen, but who knows, huh?
The Flooding Meme Winds plus waves equals 1,100 dead in Bangladesh from a cyclone so far.
Restrictions on Travel Meme French rail strike is a mess. But, then so is the one in Germany.
Warrantless Searches Police in Boston are planning to show up at homes of school kids in Boston and ask permission to search for guns. Parents will have the right to say "No!" but for how long?
Kindle-ing Thomas Claburn's piece on the new ebook reader coming next week from Amazon is worth reading: "Amazon planning e-book debacle."
Looking Up The Leonid shower peaks this weekend. And here, all this time, you thought the Leonids were rewarmed Trokskiites.
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Coping: Grain Pricing, Co-ops, and A Little Career PlanningA number of people wrote in about those 50-pound sacks of multi-grain that I told youi about earlier this week, wondering about price and all. The source of the tip offers this:
There are lots of local co-ops around - check them out! One in the Seattle area I am familiar with is PCC... --- While I was running out the daily tally of "shortages" in the Google news search engine, I noticed a headline out of this weekend's Seattle Times, that begged for comment: "Gates sees engineer shortage looming" goes the story. Gates is onto something here (not just because he's super rich, either, although that may help).
If you read my subscription newsletter, you'll already know my general view is that globalism is about stretched to near its limits, and that over time we will have to see a re-industrialization of America and that will mean the all-time high of the service industries will come down to more sustainable levels and that regular folks will have to get back into the business of making "things" because over time, globalism is self-liquidation, in the sense that as purchasing power parity (PPP) really does work out, the relative cost advantage of cobbling a shoe in India, rather than making it close to where it's consumed will evaporate.
A fine and lofty economic notion, you're thinking. But, what does this have to do with how I spend my weekend? Ah, just so. It begins with a little research into what you might be doing tomorrow and a great source in this regard is the US Department of Labor's Occupational Outlook. Here, you can see what expected demand for various professions will be, and along with demand comes what? Higher wages.
My suggestion to you is that you look up your current line of work (if you've managed to remain employed) and see what the trend is. Then, figure out two or three other jobs you might like doing and compare them with your current gig. If you find a higher growth alternative, and can start reading up on the subject, getting a little training now, and do the transition before the whole herd of service economy folks are pushed into it, you'll not only get a head start/seniority, but you'll maybe get yourself into a position where you will be able to move up the food chain into a supervisory role. Thinking money here.
There's also a section called "Tomorrow's Jobs" which is worth visiting because it offers the mainstream's view of where jobs will be in the future. And example:
I don't happen to agree with some of their projections, because it's misses things like a collapse of the US dollar, the end of conventional importation schemes to work labor rate spreads internationally, and the whole rest of it, but education and health services seem like pretty save bets. Seems like there's a never-ending supply of people that need more edumacation. Not to mention a case of bird flu, or whatever spills out of a lab next, eh?
I'm not suggesting you go out and bury yourself in student loans to pick up just any old job, mind you. But, I am suggesting that you can pick up a trade like metalworking, one of the skills I'm brushing up on, at very low cost by simply getting the books, some tools, and teaching yourself.
My sense is that time is coming when the more skills you have, everything from backwoods survival to being able to build a modest home including the wiring and plumbing of it, and making of some simple goods for sale will be very valuable contributions to your odds of surviving whatever comes along, especially if we "go Argentina" with the dollar over the rest of the fall and through winter.
Oh, and if you've got kids in school, print up that Gates article and make 'em read it. Free lunches aren't forever and the more money your kids make, the better your odds of having a fall-back position should social security fails in some future economic calamity. ---end of the coping clip n snip ----
Around the Ranch OK, there I was, pushing dirty around a culvert at the creek and I noticed wate5r coming out of the Kubota diesel. "Yikes!" I'm thinking to myself, with only 100 hours on it, why is a nearly new diesel overheating? I was working it hard, but not that hard.
A cool down and jaunt back up the hill to the hose led to the answer: I had been doing a fair amount of bush hogging and the brush was about 6 feet tall and going to seed. Ah, the seeds. There had been so many of them sucked into the screen ahead of the radiator that they had stopped up the air flow.
No problem: a couple of minutes with the hose, and all clean again, it was back to work...a first that even a few farmers might not have encountered. --- Elaine got the mouse finally. She'd been tearing apart and sterilizing the kitchen every day for nearly a week. Fine mouser, she is. Better than the cats, any day.
Peoplenomics: A Bad Thing to Hear Elaine and I were just about to sit down to dinner when an old friend called Friday night, concerned about how things were looking in the fixed income market. I've got sources in a lot of places and some of them are seeing the market priced as though the foreclosure rate will increase to where between 20% and 50% of all subprime loans will be foreclosed on in the near future. Later this week, a spreadsheet I'm putting together based on how the next two years will look, but if you can wrap your head around 1-million+ being foreclosed on, you'll get the idea. But, that's not the really bad news. It actually gets worse from there...
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Pass It On UrbanSurvival depends on having lots of people read this site. If you have friends, tell them about the daily reports and if you own a web site, a link to this site is always appreciated. If you have Outlook/Express click here to send an email to someone you know telling them what a strange site you've found.
Can you trust Politicians? To get your "No Incumbents in 2008" click here. They're just $5. And no, that would not keep Ron Paul from running for the White House - he is not an incumbent for that office - having never held that job before, you see.
Guide to Living Cheaply Order our handy ebook "How to Live on $10,000 a year or less - and learn to live like a Third World person now. It's coming anyway, with big job layoffs this summer - and by ordering now, you can beat the rush...You may have more time to read this fall if the economy falls apart as I expect...
Friday November 16, 2007 So Much for Liberties As if American's Liberties aren't in enough trouble already, we reported in a special update yesterday that the offices of the Liberty Dollar folks in Indiana had been raided, and among other things, two tons of newly minted Ron Paul commemorative Liberty dollars had been confiscated. Sadly, the report is now more widely reported. Here's what's on the Liberty Dollar web site:
I expect the real reason for the raid is that these are the folks who have stepped on the 'tail of the beast' by suing over the bankster-backed paper currency. What happened to Article 1 Section 10 of the US Constitution which specifies gold and silver is money?
States have be co-opted into the paper game, too. But as I read it, they could simply require what the Constitution calls for right there in black and white. Don't try to wake your legislature, though. Pork's the game and corpgov's the name.
Turkey In Six, Rally in Four? Something to start watching for is the beginning of the 'release period' emotionally, which curiously enough is timed for Thanksgiving Day next week. That's when what has been an emotionally 'building' period, since about mid-September will turn to 'release' language. That's when the headlines usually turn gory with bombings, shootings, and the really ugly stuff coming to light.
In most times, we would expect to see something of a pre-holiday rally to occur, although not for too long, as the Nov. 22- January 24 ('08) period is largely financially oriented. Still, there is some reason for a rally in sectors, like financial stocks, because of the decision out this week from the FASB to hold off for a year on getting a full accounting of 'non-financial assets' although as Nouriel Roubini noted, this will likely only exclude business combinations and the like. Yup, that sounds like hedge funds get to skate! I called the FASB yesterday to get a little more definition of just how this will impact the CDO/CMO world, and I have yet to hear back from them. Paper over the problem, quick!
The stock market will be closed only for Thanksgiving itself, not for the day after. Back in the days of real brokers (few have survived the automation of Wall St.) the day-after was jokingly referred to as "national Call Your Broker Day." In more recent times, its when small groups of investors gather around TradeStations and try new strategies out, and tune up the choir.
One of the favorite songs to hum, while back testing straddles is "I'm Dreaming of a Green Christmas. This past week, there has been some improvement in the outlook, but the view that it 'won't be so bad after all' is far from universal. Although up in Plano, JC Penny has seen a profit drop, and their holiday outlook was ratcheted down a bit.
That gets us to the general topic of what to get folks for Christmas. In a fashion trend that would bring a smile to "Leisure Suit Larry", the first adult video game to make it big, with convenience store shoppers jumping out from behind shelves to yell "Pervert!!" when Larry tried to buy a condom, we notice that retailers are looking for strong sales of 'washable suits" that won't have to be sent in for dry cleaning. Leisure suits as what the time monks would call a "self-seeding time cycle" - who would have thought? (No, you can't Google that concept, it's way too far into radical linguistics, but just remember where you heard it first...) --- I'm working on E to do a turkey with gravy and such, but the trade-off is I need to use the holiday to get some rancherly construction items done: new goat shelter, power for the chicken coop, waterline for the goats, new cabinet for the kitchen, a built-in stand for the HDTV which we'll likely get on sale in January (holding out for 1080p 46" under $1k), and a remodeled master bath. Hmmm...that's a pretty fat list for a turkey. She may have to throw in a few pies and a special Christmas dinner as well, but it's true: power tools are a gift that keeps on giving.
In the event you're going over the river and through the woods and all that, gasoline to get you there will cost more, and although oil is down a tad momentarily, US News Figures $4 is on the horizon out there somewhere.
Dreamer Dreamer of the Day award goes to Treasury Secretary Hank Paulson who is signaling he expect the U.S. Dollar to rebound.
Let me think this through out loud: Out-sourced manufacturing to China and India, software development, too, screwed most of the planet with liar's paper, print more money than necessary causing massive inflation (over 19%) at the financial abstractions layer, as much as one-third of Mexico is now in the USA, and half a trillion (near enough) has been spent on Iraq War II while plans are in the works for Iran and Syria War I. Oh, and Consumer Debt plus National Debt about equals GDP.
Sure sounds like an air tight case for a strong dollar to me, Hank. Don't bogart that thing, share!
Citibank Transfer Limits A reader sent along an email said to be from Citibank titled "Change to Inter Institution Transfers User Agreement" which is worth passing along:
Sure enough, a check of the Citibank online agreement shows a monthly limit on standard IIT transfers of $10,000 per month, and a monthly limit on next day transfers of $2,500! "Security" huh?
Restrictions on Travel Besides the "Papers Please" plans of the UK corpgov that we reported on in a special mid-morning update yesterday, the restriction in travel meme has been dropping all over Europe due to strikes in Germany and France as well.
In in the land of the brave and formerly free, the Decider has rolled out his express lanes in the sky department, apparently not appreciating that getting to New Hampshire from LA is less of an issue than getting from the parking lot to the gate. Once HR 1955 is rubber-stamped, I will see you in the camps for that one, I'm sure.
Tales of Collision Avoidance Sometimes, Universe lines up news stories in a particular way that points to a higher intelligence of some kind playing with us all - in a wry sort of way. I'll show you what I mean: There's a ,story out of San Francisco that the Coast Guard Vessel Traffic System (VTS) did not warn that ship last week that it was about to swipe a Bay Bridge tower. But, while that collision avoidance system didn't work, we're reading about how a cockpit collision avoidance system avoided a potential air tragedy on Tuesday night at 25,000 feet over Indiana.
While reading about how an A-340 was involved in an on-the-ground collision in Paris, and at the most zoomed out, step as far back as you can to see it level, there's the question of when earth will collide with the dust ball from Comet Holmes.
There's Universe, tweaking monkey mind again, with the 'collision avoidance koan'. "Hand me my brush and the rice paper, Gozo, I must write a collision haiku to capture this thought."
Meantime, Back at the Coffee... "Starbucks issues profits warning and scraps plans as customers stay away" headlines a report. The coffee's still good, just folks is broke I figure.
Unreported Inflation is Why A reader sends this:
Quick! Get the Hedonic Adjustment Team in here, pronto! Adjust this out by saying "people are using more email which is free, so this won't matter..."
Meantime, another reader sends this little truth detector:
Chemtrails and Droughts Inquiring Readers want to know...
If I knew, I wouldn't be alive, would I? Meantime, the water situation in Connecticut grows tense, along with the Desert Southeast.
(clip and save - this might be useful sometime soon) -------- Coping: Grain, Pasta, Leftovers and Cuban Bread First off, will the reader who sent in the multi-grain information give us an update on pricing, as several readers are saying their best price is over $40- for a 50 lb. sack of the multi-grains mentioned?
Next: Keep a stock of pasta on hand. There's a pasta shortage looming in Italy right now.
A reader sends this:
And last, but not least, several good recipes for Cuban Bread have come in. Try this one, or this one. Some disagreement on whether it's best to pre-heat or start from a cold over - but that's the joy of experimenting, huh? I would expect the cold start and a water wash to yield a crisper loaf, but I'm an amateur in this area. Tweaking mandatory for whole wheat/unbleached, home ground flour, of course. And don't skip the salt! I tried that once and got bricks.
----end snip--- Thursday November 16, 2007 What's a "Non-financial Asset"? The Financial Account Standards Board issued a press release on Wednesday, which has us wondering if the level 3/ tier-three CMO/CDO paper will be spelled out by the major players in their January financials as previously believed with Rule 157 going into effect today:
I've got a call in to the FASB with a really simple Yes or No question: Does this mean the financial outfits are off the hook on their Level Three/Third Tier asset reporting confessionals? While the FASB suggested that's more a question for the SEC, but they have promised to get back to me... We shall see.
Well, this isn't creeping - this is out and out running. The UK's Daily Mail reports UK subjects will soon be required to answer 53 questions about their travel plans before they'll be allowed to go anywhere.
So, do you still think the internet discussions about the evolving Police State are just hyperbole?
Meantime, several readers have forwarded us an email saying that the FBI and Secret Service raided the offices of the Liberty Dollar and have carted off records and such. I've placed several phone calls to the group to check out the reports, but no one is answering their phones. I will keep you posted.
This would be especially interesting because the group (which has sued the government) reportedly just received and put on sale Ron Paul Dollars. Coincidence?
CPI: American Businesses' Amazing Generosity So, as I mentioned in yesterday's report, as the new Producer Price Index came out, the price of finished goods, on a non-adjusted basis was up 6.1% (bottom of column 6, Table A) on an annualized basis. And, a reasonable person (like the People's Economist here) might even go so far as to offer that because there's a 25.7% increase (unadjusted, bottom of column 9, Table B) that there's a whopper of an inflation burst off in the distance.
Even more amazing was the performance of the stock market on Wednesday, which kicked off with a decent gain on the report, although apparently, someone besides me had sobered up to the implications of this by the end of the session.
I don't know about you, but I get really uncomfortable when numbers don't 'tie together' well. My nervousness about statistical reports like PPI and this morning's CPI stems from what seems to be, at best, a 'ships passing in the night' kind of relationship. In my dunderheaded search for economic truth (and the Easter Bunny) I started looking at the PPI/CPI relationship last month and scratching my head.
Today, I'm on the verge of developing mange because the scratching hasn't gotten me anywhere. The previous month, when finished goods were also up a fair chunk (*unadjusted) I was treated to an 'offishul' report that Chained Urban CPI was up only 2.3% compared with year-ago figures. Even more interesting, last month's 'core rate' (ex food and energy) was up only 2.1%.
This gets me to this morning's point: American business is incredibly generous because they are eating, if I've got this right, the spread between increasing finished goods pricing (about 6% annualized last month) and CPI, arguably only 2.1% last month basis chained C-CPI-U. (Not to be confused with Yippee Ki Yi Yay, another measure of consumer intelligence).
Fast forward to this morning's CPI report from the Bureau of Labor Statistics:
The unadjusted core rate is 2.2%, so when I look at PPI finished goods up 6.1% and the core up only 2.2, I can only concluded that here in the Land of Milk and Honey (and oil wars), Business really is good and generous and is eating nearly 4% annualized, for which we should bow down and give mighty thanks.
Foreclosure Confusion I think I've mentioned this in the past, and now a judge has raised the issue: When a bunch of mortgages are rolled up into a CMO (collateralized mortgage obligation, a piece of paper that acts something like a bond from an investment standpoint), who owns the debt. In other words, does the debt/obligation go to the original maker, or is it passed to the CMO owner. In Eastern Ohio, the CMO owners got stiffed. This is a biggie to watch. Hit the NY Times today, too. See the Barron's article "Mortgage woes damage a GE Bond Fund", too.
That Other Lit Fuse A reader has nailed this one: Once the hedge fund whining dies down, look for big problems for insurance companies (and banks that self-insured) with their private mortgage insurance (PMI):
Answers: The plight of the PMI issuers will come next, but many have worry-wart Compliance departments that have muzzled truth tellers. So this will all start coming out in the post Nov. 22 slide into January. Oh, and about reforms? Why change anything? The guys at the top and the hedge funds which have the financial media's ear, will still come out OK. There, feel better?
Iran/Syria Campuses Reports are starting to circulate on the net about a certain University in Maryland looking at plans to deliver degree oriented coursework to American service personal in Iran and Syria. Contingency planning? Oh, I'd bet a bit more than that.
Big Quake The 7.7 in Chile yesterday is just a taste of what's to come - more big movement coming in December, linguistically, and you don't even want to know about October 2008...
Chemtrails I don't know how I missed this one, but you have got to watch the Shreveport Louisiana Channel 12 report on chemtrails that was on last week.
The Runs Vegas last night. Who cares? Wait till the January culling on financial disclosures. Even then, when what's coming in October 2008 arrives, voting may not be your biggest concern, sorry. --- Million dollar idea: How about a "Political Drama Addiction Treatment Center". You go in and sit down and and someone turns the TV off. Sheesh.
My discussion this week of shorting markets touched a few nerves. And, on both sides of the issue. Here are a couple of examples of the anger and the accolades:
Another offered this:
And then there were accolades:
And on that note, after reading dozens of well-thought out responses, I suppose we should leave it there. Something to at least think about now and then. Me? I still have this idealistic vision of a world where making money is not the most important thing. The excessive emphasis seems to have burned out resources, caused wars, and have you noticed where oil's been headed? Or, the purchasing power of your money? It's what goes into the head and heart that has a chance of transcending the end of this life -- that's what matters when you zoom out a ways. And we're all going there, so there's much work to do to be ready.
On the other hand, my financial moderation (even with access to the time machine/ predictive linguistics, which is a whole other layer of karmic burden) is why I won't be getting a Porsche 911 for Christmas again this year. Oh well... We can certainly, as civilized humans, agree to disagree. Thank you for your comments, I've read every one, but there's too much to-do list and too little George to answer each in depth. But my sincere thanks.
(clip and save - this might be useful sometime soon) -------- Coping: Beyond Raisin Bran OK, we've covered living on raisin bran two meals a day and how beans are an alternative, especially with a 50-pound sack of rice and a few bucks worth of spices. Today, another reader offers ideas for our coping with foreclosure/unemployment shared helpful hints section...
Keep sending along ideas - I'm still looking for that Cuban Bread recipe that appeared in the old National Observer (a then weekly lifestyle oriented publication of Dow Jones) in about 1968-1970 I think. It was incredible. And cheap. Elaine and I recently replaced our water heater (along with a good-sized area of flooring that was damaged when it let go) and framing in the new water heater, the time monks suggested that we put a metal grate over it (it's a 48-gallon quick recovery 'low boy' design) so we can use the small amount of heat it gives off as a bread raising station. Fine idea... A local ham radio friend says "Don't forget to get a library card!" Agreed. Best value in America today, next to the marriage license, if you happen to get into a marriage that works out well, that is. (Otherwise, the marriage license is the most expensive thing you can buy...) Shop carefully! Want a pet? You can get a 'designer dog' at the pound for the cost of shots most places, tells a happy Samoyed owner. Rescues are right. My eldest daughter's Labradoodle is a marvelous pet. And one more point to stew on:
-----end clipping)--------
Around Here: First Rate Hosting Deal I don't often put in free plugs for people's businesses, but after having had the UrbanSurvival web site on a number of different hosting company platforms, I have been pleased as punch with www.emwd.com. Their prices are good - I even set myself up as an affiliate, not to get rich, but because I really get first rate service from them. So in that vein, I wanted to pass along an email which came in this week about a genuinely good deal on today only:
I don't know if you've noticed, but for a 'hobby' site, UrbanSurvival has an 'up-time' record since I moved to EMWD a year ago August that's very good. And, the mirror site (which you should bookmark, www.independencejournal.com has performed equally well. EMWD does a fine job of applying the latest patches and such, which seems to have kept for the moment, the hackers at bay. --- Because I have on occasion gotten a day or three behind in setting up new subscribers to www.Peoplenomics.com, our weekly in-depth reports, I am setting up an automated account management system over the next few weeks. More to follow.
Peoplenomics: A Bad Thing to Hear Elaine and I were just about to sit down to dinner when an old friend called Friday night, concerned about how things were looking in the fixed income market. I've got sources in a lot of places and some of them are seeing the market priced as though the foreclosure rate will increase to where between 20% and 50% of all subprime loans will be foreclosed on in the near future. Later this week, a spreadsheet I'm putting together based on how the next two years will look, but if you can wrap your head around 1-million+ being foreclosed on, you'll get the idea. But, that's not the really bad news. It actually gets worse from there...
More for Subscribers Subscription Information
Pass It On UrbanSurvival depends on having lots of people read this site. If you have friends, tell them about the daily reports and if you own a web site, a link to this site is always appreciated. If you have Outlook/Express click here to send an email to someone you know telling them what a strange site you've found.
Can you trust Politicians? To get your "No Incumbents in 2008" click here. They're just $5. And no, that would not keep Ron Paul from running for the White House - he is not an incumbent for that office - having never held that job before, you see.
Guide to Living Cheaply Order our handy ebook "How to Live on $10,000 a year or less - and learn to live like a Third World person now. It's coming anyway, with big job layoffs this summer - and by ordering now, you can beat the rush...You may have more time to read this fall if the economy falls apart as I expect...
November 14, 2007
PPPee
"How can you say that?" you're wondering. Simple. It seems like every time I look at the PPP report, it seems like there's always more price inflation in the crude goods than ever shows up in the finished goods. I haven't got the time to run the numbers out, but it would be a Grade A econ paper for someone with more time to work on. If crude goods keep going up 5-20% more than finished goods, it implies that someone in the production pipeline is absorbing a loss, month after month, after month. But, we all know that can't be. So, where is the missing loss?
One possibility is that the price increases at the crude level were over-reported. Hundred dollar oil says no, those input costs are really going up. On the other end, finished goods prices might be significantly under reported. You go think about it. I'll explain in a sec.
Meanwhile, here are today's numbers:
OK, here's the part I'm talking about that bothers me: Go to Table A: Change in finished goods from 12-months ago (unadjusted) 6.1%. bad news for Fed rate drop cheerleaders. Bullet point: Right there, you know that the 3% inflation in CPI is a statistical wet dream: Business is not eating 3% a year. Guaranteed.
And then in Table B, the change in Crude Goods 12 mo, unadjusted is 25.7%!
I want to know where the hell are all these charitable businesses???!!! They sure aren't keeping my CPI/Personal spending at 3% per year, or worse, the measly 2.3% Social Security increase. Are they where you live?
Clean Money, Dirty Money Something I wrote about yesterday morning hit a nerve and deserves a bit of serious consideration this morning so you don't misunderstand what I (and the time monks) are talking about when we get into a discussion of what's an ethical investment and what's not. First, here's what a reader sent it that prompts the discussion of 'ethical investing' as the key topic of the day:
We kicked it around a fair amount yesterday, my various sources, including the time monks up at www.halfpasthuman.com and their assessment is worth pondering:
If you've been paying attention, the time machine/predictive linguistics work suggests that a number of the presidential wannabe's will be soiled by dirty money revelations in that period, but the point of the discussion is to consider what's 'clean' money and what's 'dirty' in the investment world.
A number of dear friends over life have told me (with some pride) that they invest in 'socially responsible investments' only. No war material manufacturers, gun makers, and so forth. But the distinction between socially responsible really goes much further than that.
If I invest in a commodity option (as I have) and expect it to go higher because of my government's watering down of my existing purchasing power, that's not a 'dirty investment' as I see it. Quite the contrary, it's simply a hedge against the banksters in power. If, come next spring, I am able to sell grain call options for more than I paid for them, it will be because the Southeast is a desert, the money has been watered down, and the prevailing 'general level of prices' as Galbraith might have put it, will have gone up and I will simply have bought a physical thing when no one else wanted it, and sold at a higher price. Or, same valued, just with watered down money.
I'd offer that buying a financial abstraction, however, such a a derivative, and looking to make money noise trading against one of these 'greater fools' out there, is a different thing. And, shorting the market, which I used to make good money at, is no longer in my blood.
My commodity guy, JB, who I chatted with this about yesterday, argued that "What's wrong with shorts or puts to hedge what are already gains in a stock portfolio, for example? After all, when an investor has a gain in their portfolio, going short is just a simple hedge mechanism to preserve the gain, right?"
Well, not quite. If I buy a stock, and it goes up a few hundred percent, and I try to lock in the gain, the honest thing to do is sell the stock, take the gain. But, in buying a short to hedge the gain and so I can hold onto the position even longer on the chance of a greater fool showing up, what the short buyer is really doing is trying to avoid the market's natural repricing of my stock to a lower level. In other words, shorting is, at some deep karmic level, a lot like wanting to have your cake and eat it, too.
Taken to its extremes, this buying shorts leads to 'naked short selling' which can in and of itself move markets which might not otherwise be inclined to move based on fundamentals alone.
Oh, it also leads to the creation of a whole new layer of finance which around here we call the 'abstraction level'. When we're using savings and investments to build factories, savings are being put to work for the greater good. But, as the time monks point out, when money at rest goes out on the town all 'gun slinger like', shooting for gains solely at the expense of slower guns, you arrive at an nevitable outcome (now linguistically only a month of two off).
There's not a specific word for it, although in the 1930's it was called a Depression, but here's one for you to consider: Moneycide. A sort of 'last hedge fund standing' after the Shootout at the Fixed Income Coral.
To borrow on the concept behind Tobin's 'q', it's what happens when all investing is about taking money from others and nothing's left for investing in plant, equipment, research, and genuine human wealth. This is why I'm not worried about ever getting to the business & tech singularity. Greed's likely to stop us well before that. The financial abstractions layer will see to it.
Falling dollar? Foreclosures going up? Crime in foreclosed homes? Duh. This is just the start of the gun play.
Thought Control Department I have a fair number of sources in the world of finance. What's interesting (and it's why only one side of the evolving financial crisis is showing up in most headlines) is that the hedge funds are talking to whoever they can get press from, but the real buyers of fixed incomes (those publicly traded) have slapped literal gag orders on their employees to shut them up because they are scared spitless that something which might be said (without being first sanitized by a PR department and legal - yeah, don't say anything without clearing it with legal) could be construed as financial advice.
It's a delightfully confounding situation: The people who could speak truth are gagged by Compliance Departments which just about ensures what comes from the Shootout at the Fixed Income Coral will be widely misunderstood by the public. They'll be foreclosed on right and left and will still be asking "Gee, how did that happen?"
So, on behalf of the hedge funds, I'd like to thank Compliance Departments for keeping a lid on the rest of the story so effectively. And you too, Legal.
Thought Control Department, II Yeah, I source Wikipedia a lot around here - darned useful source for all kinds of information and all, but there's a level to it you need to be aware of. It is a list of "anonymous Wikipedia edits from interesting organizations." Top government departments (or computers therein) re-editing wiki's: NASA, the Veterans Affairs folks, state of California, and the Department of Homeland Security. See the "most common .gov's" list. Or, democrats 55 edits, republicans 129 if I read it right.
Other resources: Wired has been tracking some of this rewrite the net wikis stuff, too.
Now, this isn't to say that organizations, such as government agencies and specific corporations are deliberately doing wiki revisions. But, when IP's (internet protocol numeric addresses [go read up on the OSI model]) are pinged, they seem to come back to the addresses tabulated on that edit tracking site. And the edits may come from just plain folks, not some kind of grand conspiracy.
And, to take that even one step further, could this all be IP spoofing by some very clever 'other party'? Oh, uh, sure. Still, it's a data point to keep in mind: even in the open world of the internet's wikis, there's the potential/reality of a lot of edits by editors who may have a vested interest in a little 'thought forming'.
No Mo 'Ahl OPEC has decided they won't raise output to keep oil prices down. Pick your own slant on this: Either a) they are greedy or b) they're already at max output or c) all of the above.
Good Little FCC Boss Corpgov gets more concentration of power as the FCC moves to loosen cross-ownership rules on newspapers owning TV stations. Makes sure the corpgov lock on media is completed. Remember when media was tested on meeting the public's needs, concerns, and interests in return for the use of the public's airwaves?
SF Nuttiness San Frannutzo is issuing ID cards to all city residents. Yeah, a municipal ID card is the leading edge of the city-states that the linguistics have been mentioning. Paper's please?
Readers Who 'Get it' Here's a nice summary:
Wait till you read what's coming up in Peoplenomics this weekend. A trader friend in Chicago said "That's friggin' brilliant" when I ran it past him Tuesday...you can judge for yourself this weekend. ----- (clip and save - this might be useful sometime soon)
Coping: ISP's, Farmers and Rice A couple of good responses to our work-in-progress about how to cope with the hard times/foreclosures etc.
You might have missed the discussion of time and money. If you want to have access to the net, you can get it (dial up) for $10 a month from places like Juno.com, NetZero.com, and others. No, you won't be able to download 20 swiped .MP3's an hour, but a $150 used computer, Ubuntu Linux and $10 a month will get you basic net access and the savings you'll find poking around www.craigslist.org, not to mention job leads of Monster and so forth, will be worth many times the $10/month. No need for newspapers, magazines, and such either.
Reframe your expectations! Time costs Money!
More eating ideas:
Importance of Rice
----end clip -------\ Tuesday November 13, 2007 Big Picture Review Not to sound like a broken record, but it's important in the bigger scheme of things to keep as broad a perspective as possible during times of major change. Close your eyes and pretend that you're seeing this in a nice cool boardroom with a hot cup of coffee and there are plenty of flashy graphics: Here's my personal expectation set for the coming months, based on a lot of inputs:
OK, that's the general outline. Now, how am I planning to position my personal account? Readers are sending me emails like this one all day long:
OK, sure, there are ways to play the downside in the market. One way would be to buy puts in a Dow tracking stock, or, if the mood strikes you, you could play the down side of any number of other indices such as the S&P or the NASDAQ 100 ETF QQQQ's.
However, before you run out and lay on a lot of puts (options that make money when markets go down) let me point out two things: I consider myself a fair trader and I managed to turn a 'test case' $1,000 account into $9.25 in about a month, even though the market went exactly where I thought it would. The reasons were two-fold. First, the professional options traders had already bid up the price of the options to levels where only a great calamity would pay off, and 2) when it looked like it would, in comes the Fed/plunge protection team (See President's Working Group of Markets, better know as the plunge protection team, whose existence has been debated, but it's right there in Executive Order 12631, and uses Economic Stabilization Funds from Treasury) and they stop the downside before it got to serious. The net result was that I lost money. If you think you can a) be the pros and b) can deftly move ahead of the Fed and the PPT, lot's of luck. Personally, I think it's a fool's game (unless you can make money at it; then you're a genius.)
The second bullet point is that you might ask yourself a little moral question: With people's life savings/retirement accounts being wiped out left and right by such a possible future event, would you want to profit from their misery/loss?
The country's economic system is quite seriously screwed up because what we have going on at the moment are a bunch of hedge fund players making bets on sub-prime, Alt-A, and even prime mortgages, not to mention all the collateralized consumer debt paper out there (Where do you think piles of auto loans go?) and they are pricing the paper (pseudo-bonds) such that it foreshadows and event of equal magnitude to the 1930's collapse. Do you want (as a further burden on your soul) the responsibility for profiting from misery? If you do, then skip church and become a hedge fund manager.
A couple of numbers I penciled out for Peoplenomics subscribers last night: Up to 6.8 million humans could be displaced by foreclosures over the next 24 - 30 months. The cost of just the residential foreclosures could be as high at $583 billion - although I can see the case that Deutsche Bank laid out yesterday that a $400-billion impact would be coming. There's also the case where the impact goes over $1 trillion which we'll go over in a minute..
To get to the half trillion residential mortgage figure, I use a 'ripple effect' multiplier of 2X. In other words, for every primary foreclosure, there will be secondary/tertiary foreclosures as the service businesses that are afloat because of primary jobs, have to scale back.
One of my sources says no, don't do that, it makes the analysis less credible, not more. OK, so then the residential downside (no ripple multiplier) is only $192 billion, but again, not including other impacts such as the CDO and commercial real estate failures. Even so, cautions my source, just mention there's some kind of multiplier and let people guess it for themselves. Fair enough. ONLY 3.4 million homeless in the next 30-months. Over a half trillion, then, if you're as purist.
Which my attorney is not: He comes to the problem with a different approach:
Another source tells me that a HUGE point missed by most, is that the real losses that will be taken in the developing Great American Foreclosure Party will be taken by the lenders, not the borrowers. Oh sure, the borrowers will lose the house and all, and yeah, they will be homeless, sure enough. But the real big losses will be taken by the lenders. Here's why:
In a sense, this does seem to change the argument that the lenders involved in this are predatory now because they are about to get whacked. What's really going on is a great karmic turn of the cycles where predatory then means victims tomorrow. The lenders will say that people may get to live in a home for a year, and some will no doubt strip out the copper, appliances, counters, and cabinets, true enough. But, we have to be straight with who put them into those homes in the first place. It's true that there will be additional 'all-in' losses on our example $150,000 home, such that a lender could be in $200,000 in loan, have to put in another $35,000 to repair the home ($235,000 total) and then after selling expenses in a falling value market maybe lose $100,000 on the whole deal.
All this goes to the point that these lenders are (more or less) suddenly repentant 'victims' but when the loans were being written they were predatory. Just because they are not predatory today doesn't get them off the karmic hook for their past, a point which has not escaped Universe which has a way or working these things out, much to the gnashing of once-predators protesting their recently innocence - as we're presently watching unfold. --- I have no idea why LameStreamMedia is not trumpeting this stuff. We're already staring down the worst Christmas in more than a decade and business inventories are starting to build. The consumer is getting scared.
Evidence? You want evidence of consumer fear? Here's a letter from a reader that rips me apart:
I talked with Cliff about this and he made a very interesting point: Raisin Bran is good, but beans are much better. So in addition to talk about the straight economics of what's ahead, we plan to offer occasional nsights into how to cope effectively with a sudden/catastrophic/unexpected/severe decline in household income because so many people are there (or may be there shortly). ----- (clip and save - this might be useful sometime soon)
Coping: Eat Well, Live well. From moon@halfpasthuman.com (Cliff)
We're planning to have "Coping" notes now and then. Amazon has copies of the bean book used starting at $7.50. (*No, we don't make money on the link...this is NOT all about money, remember?)
----end clip -------\
Praying for Rain In Georgia, prayers for rain today.
The Runs Worth reading: "Bunker Hillary: Clinton's Strategy for crushing the media." Winter disclosures linger linguistically - so not to worry.
Pakistan Simmering on high heat as the former PM is under arrest, again.
Oil & Wind Right on schedule linguistically, the wind storm over the weekend has left 20 sailors missing and an oil spill mess in the Black Sea.
Universe Winks With all the talk of bulls and bears, HPH chief time monk Cliff and I get a real kick out of comparing notes about how Universe always speaking, but how no one seems to really 'hear'. Which it does, if you listen closely and keep your antennae up. So here's one of those news stories that causes us mutter "Hmmm...what is Universe telling us with this?"
From the National Geographic site: "Most Endangered Bears Ranked". Universe has this really odd/'wry sense of timing.
Your Privates Privacy concerns continue to pop all about. Latest:
All distilled to a great question in the Seattle PI "Privacy Rights: Trust Government?"
Line Up Report out that Denver International has the longest lines in the country. Must be all the aliens from under the airport, huh?
Gore's VC Gig Guess who has joined a venture capital group?
Around the Ranch Weather in the low 80's today, just about perfect. Still trying to get the shop organized. Seemed every time I got started in a project Monday, the phone rang. I have my egg timer out. 3-minute phone calls only today; with a lone exception: Consulting clients. My stomach has a good connection to my ears.
Monday November 11, 2007 Advisory: New Peoplenomics Update Posted Subscription information here.
Half a Holiday First things first. This is a 'half holiday' for the markets. The bond market is closed, the stock market is open. What as time to ram up the dollar in early going, huh? Surprise: That's the plan for the day, and with it, at least for a short time we will see a drop in the metals.
This weekend's Peoplenomics worked on the issue of "how big" will the foreclosure fall-out be, and I'm pleased to see that someone else is reporting on it: Dan Dorfman at the New York Sun is headlined "Talk of the Worst Recession Since the 1930's". Elsewhere, the meme is gathering steam: "Mortgage Market Losses may Be $400 Billion, Bank Says"
Thanks to sources, I have a pretty good idea how the numbers are going to work out - and I will sketch them our for Peoplenomics subscribers in a special 'after the close' update today.
In the short term, I expect the market will fall, but only for a couple of days. Then we get the pre-Thanksgiving rally, and then linguistically, we get our major emotional release period starting on the 22'nd with my to "be very afraid dates" are Nov. 29 and 30th, just because it would rhyme so well with the declines in 1929 and 1987.
By the way, if you didn't see John Crudele's piece in the NY Post last week, about how Argentina is going to borrow a few pages from the US Department of Labor on how to make inflation statistics look way better than reality, click here and learn. I'm not the only dog barking up that tree.
The Week Ahead What's 'framing"? It's the background as a reader that you bring to reading a fresh news story - and the kind of mindset you're in when you read it. Some suggestions:
Web Bot Hits OK, let me see, hmmm...what about that 'wind driven event" that was in the predictive linguistics from www.halfpasthuman.com for Nov. 8 -11th? Here we go: Fatal Storms ink Five Russian Ships. And you saw all the flood/wind-driven water stories out of the UK over the weekend? Yup, right on time.
Still skeptical of the predictive technology? (It's written as fiction, and not our fault the reality shows up from Universe to fit the fiction, eh?) Well, linguistically, we were supposed to start hearing around this temporal space that there would be 'calls for audits of gold'. Sure enough, Ron Paul is suggesting just that at a weekend appearance at Independence Hall?
But this call by Paul (has a poetic ring to it, don't you think?) is only the leading edge (the kick-off of the shift) of the newly developing meme that materializes out of modelspace, say the time monks. With their exclusive permission (links here and to www.halfpasthuman.com required if posted):
Uh...let me see, that would be about the time the tier-three confessionals show up in the quarterly financials of the BigCorps, if John Crudele's column is right...yup, that'd be the thing to watch. --- We're about four weeks plus three days away from the launch of the space shuttle Atlantis, and much gnawing and gnashing by the time monks about this, because as previously reported, there's linguistic shift to the idea that something dramatic happens over the Atlantic on this next flight. The problem is, there's not enough resolution to the modelspace to be able to produce anything specifically actionable from it. A couple of aerospace engineer/readers have asked why we're not on the line to NASA about the shift. And tell them what?
The problem with time (or more correctly, with humans in the time stream) is that in trying to change a predicted outcome, we could very well become the causal agent. So suggesting to NASA that they double or triple-check every bolt, could actually cause the failure indicated in the shift. So in a sense, history has already been written: We just get to sit around and wait for it to show up. The language shifts give us a sense/feeling of what's coming, but not a way to change it. Very frustrating, indeed.
We hope nothing happens, but should it, I will post the whole extract of the linguistics here, so you can read the shift prediction yourself. Language going to the 'four travelers' and all.
Click to Be Single
What's the logical outcome of this? Hmmm. Let's try this mega-million dollar idea: One Week Tax Marriage Dot Com. YouTube could set up a special 1-week marriage section, folks could be matched up based on maximal write off's for both (maybe with low income folks earning a small fee) and presto! Everyone in the country gets to file 'married' and it would all be nice and legal like. OK, back to the coffee...
Around the Ranch "Best laid plans of mice and men..." comes to mind in reviewing the to-do list for the weekend. None of the big items got done, and the few small ones that got done were seeming to take forever to actually get accomplished.
As an example, Elaine suggested "Why don't you blow the leaves between the buildings out into the woods?" Ah, peach of a project. Shouldn't take more than a few minutes. Wrong. First, I blew about 7/8th's of them into a pile along a break in the land. That took the first hour. There was a slight wind (from the wrong direction, of course!) and that meant extra time to play round-up. With the wind piping up another couple of knots, I knew I couldn't do it with a puny little gas leaf blower - this was a case for the heavy equipment.
Out came the Kubota, and about 45 minutes later (and 27 scoops full of leaves) I had assembled a pretty decent-sized leaf pile at the edge of the woods, making a mental note that I could push it back from there with the bucket later on; snakes and other undesirables tend to live/winter over in 7-foot high nicely slumped leaf piles.
Not done yet, though: Because the bucket on the tractor has tines, and because two of them caught roots exposed on the side of the break despite my gentle hand on the hydraulics, I was then faced with another 15-minutes of using the loppers to cut off exposed roots, with another mental note to throw some quick setting grass seed in the area right before the next rain. Damn, project creep. --- Competing for my attention, besides the Peoplenomics sources who were busily filling me in on what's coming in foreclosures, there was also the new Clive Cussler book ("The Chase") that I mentioned last week. Got about 6-chapters into that. --- Knowing that today would be a half holiday, I decided to use Sunday checking out my slow scan television hook-up on the HF ham radio. It was a great decision. I was able,to send a picture of my ham 'shack' up to a fellow ham in Ohio, who then took the picture of my ham radio 'shack', put it into one of his contact confirmation cards, and then send it back to me. With his kind permission, here's how it looked after a round trip from East Texas to Ohio and back:
The scratchy lines in this picture are not the fault of Bob's set-up, or mine; that's propagation between here and Ohio on Sunday afternoon. But when propagation is really solid, as it was between here and Ed's place in Virginia Beach, a virtually noise-free picture is possible, and it's fun to show your ham radio buddies (about 10 of us were swapping pictures on 14.230 MHz) how the equipment and antenna array are set up. Again, with permission:
It only takes a minute (or so) to send a picture over slow scan TV (SSTV) for short, and I think the reason we all do it is because we like to stay 'sharp' on our digital modes skills. Moving a picture to Virginia is a simple matter when there's a high speed internet connection around, but remember, all this is going on exclusively over radio.
OK, so Intel has a new super-dooper HDWeb chip. Will that improve my slow scan pictures from Europe? --- It even got me to wondering if it would be possible to encrypt a hidden message into the HF picture, and see if that could be recovered, or what the data failure rate would be due to propagation, but that gets into an area of science called 'steganography' and it's purported to be used by terrorists to move messages around the internet contained in pictures.
And, it's not just pictures. Any digital 'container' can be used, including .MP3 files, .WAV files, and I suppose .PDF's. The time monk's advised me "Don't play with that stuff, because just having it around might land you on some kind of a watch list." No problems: I haven't/ don't/won't.
But, sending pictures about (*not used as steganography containers!) gives ham radio ops a feeling of 'network independence'. We can take it to the sky, so to speak, and PSK-31 is just about like email or a chat on YM/IM. Just keeping current in what's going on in software (OK, and a subscription to 2600) does keep me fairly current on reliability of infrastructure and the nature of threats.
The good guys already know this stuff, but unfortunately, so too do the 'bad guys' who, according to recent research of of Purdue, are already using it - and when you do a little research and keep current on the arts involved, it places some (not all) of the WOT surveillance into different perspective.
Half a Holiday Redux I sit around on mornings like this one, remember friends who didn't make it back from Vietnam, friends who did and died here of their injuries, and I salute our forces in the 140-some countries where we have them, and admire their courage, dedication to Country, and self-sacrifice. A toast at sunset with my retired SF neighbor seems in order today.
Now, if we could just elect political leadership of similar caliber to America's Armed Forces, end corporate contributions that leave only an illusion of 'will of the People', the American Dream would be safe. It's not yet, but it's sure as hell still worth fighting for.
News from Elliott
Wave International
Write when you get rich,
George Ure, The People's Economist
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